Foreclosure ban end.

[scaredyclassic]

[quote=svelte][quote=an]
Yes, every crash is different. Not every crash cause everything to crash. Oil prices in the 70s caused massive inflation and housing went up almost 10x.
[/quote]

The stock market crashed in the 70s.

[img_assist|nid=27356|title=December 1972 SP500|desc=|link=node|align=left|width=466|height=297]

[quote=an]
We have never ever before talk about up to $10T in stimulus. I don’t think it’ll stop at $10T either. [/quote]

Perhaps, but I’m not convinced everything that Biden has proposed will actually be passed.[/quote]

things must be frothy if scaredy is contemplating taking on more debt. My mortgage is tiny and refinanced at 2.5, but it makes perfect sense to me to take a recent offer of 300K extra cash out, refi the whole mess at 30 years at 2.625%, and dollar cost average the proceeds into reits, gold and international stocks over the next 36 months.

sure seems likely from my distorted vantage point now that those assets will be more than 26.25% higher 10 years from now, or really any asset will be higher 10 years from now. it is almost hard to visualize a longlasting crash. even I, a pessimist that bums out the other pessimists, didn’t sell when the pandemic hit, just kept buying. I was like, eh, nothings real anyway. i capitulate to insanity.

not that I’ll actually do it, but it seems like a logical thing to do. which means it’s probably insane. the more likely thing I’ll do is pay off my stupid mortgage. stupid.

[svelte]

[quote=scaredyclassic]
it is almost hard to visualize a longlasting crash. even I, a pessimist that bums out the other pessimists, didn’t sell when the pandemic hit, just kept buying. I was like, eh, nothings real anyway. i capitulate to insanity.

not that I’ll actually do it, but it seems like a logical thing to do. which means it’s probably insane. the more likely thing I’ll do is pay off my stupid mortgage. stupid.[/quote]

It is pretty darn rare for assets to stay down over 10 years. I think the Great Depression is the only period I can point to like that in the US. So you’re probably right.

But we could certainly end up like Japan where things are down for decades.

Or AN could be right, perhaps inflation will stay high for much longer than I think.

The crystal ball is sure hazy. As it always is.

I’m not sure enough about anything to go all in on any strategy. I’ve kind of hedged my bets. I have money on the side so I can react should things tank. I have money in the market in case it keeps rising.

I’m still paying off my house though because i will sleep better when I know it is mine and as long as prop taxes and insurance are paid it is mine forever. I’m in a position right now where practically everyone in the US would have to be in dire straights before I would find myself in trouble. I’d like to keep it that way.

I’m not trying to have the biggest stack of cash possible when I pass. Just trying to create an enormous safety buffer around me so I can live out my final years worry free. That’s all I want. A worry-free retirement.

[gzz]

The Dow hit 380 in 1929, and didn’t get that high again until 1954.

It was at 600 in both 1959 and 1974. Because inflation was high then, that was about a 40% loss over 15 years when adjusting for inflation.

The 1929 to 1954 0% nominal gain also represents about a 40% inflation adjusted loss over a 25 year period.

While a lot of people are worried about inflation hurting the stock market, I think the larger risk is the share of GDP going to public company profits could decrease substantially due to populist redistributive policies. Both direct cash transfers, but also things like interest rate caps on credit cards and antitrust cases that hurt the profitability of tech monopolies.

We’ll see if the Dems hold Congress next year. If they do, and Biden continues to be more substantially more popular than Trump, ramped up taxes on corporations could be the result.

[sdrealtor]

Next point to address is TG personal experience. He was one of us following things much closer than most. He’s a sharp, opportunistic guy and his expereince does not match the average. Some people always beat the market. He caught the bottom and got himself a sweet deal in a market that was particularly hard hit and overshot what it should have.

More reasonable price for that was probably more like the mid 300’s vis a vis rent vs buy. Then he invested in improvements on a house that was not cared for. Fake lawns dont grow on trees or lawns nor does anything else he put into making his house his own. End of the day a more typical base price for the cost of that house as it is should be closer to $400K.

That was 13 years ago. At just over 5% /yr a house will double in 13 years. Thats only marginally more than what we have truly expereinced in inflation. Time passed and we got older. Interest rates are almost half of what they were back then also.

The fact that houses have more than doubled in 13 years isnt so astounding as to how it happened and usually does.

We would like to think homes go up gradually over time in a even climb. They dont! At least not here! They muddle, they climb slowly than they gap up astromically in a very short period of time. It happened between Nov 2003 and Feb 2004. It happened again between Nov 2020 ans Feb 2021. Its the way things work here.

I will happily take your bubble bet right now! Bubbles burst they dont slowly deflate. Im not sayiing prices wont slow, flatten or pullback but barring a cataclysmic event like a natural disaster or foreign invasion there will be no burst

About 10 years ago I wrote about what I thought would happen and it did. There are 3 main levers. Passage of time, Interest rates and inflation that will make what seemed unreasonabvle pricing levels reasonable again. The last time it was mostly time and interest rates with a little inflation. This round it inflation and time with sustained low interest rates bring us back into balance.

There will be better opportunties ahead but anyone expecting 20% + declines in the better areas of SD will be sadly disappointed. I dont follow TG’s area as closely but know prices there have not gone up there close to what they have here. They dont have the desireability up there to the big money relocators we have here but folks from here will increasiong get pushed up there to commute. So I’ll go with no more than 20% there as well.

Betting window is open!

[sdrealtor]

[quote=The-Shoveler]Good to see you post again TG,
Yea I agree sort of but right now “NOTHING” is allowed to crash. I kind of think as soon as (or if) the stimulus sugar high ends things may crash.

But I do see two things that will give this a few more years yet to run IMO.

1) We are still way underbuilt so that may keep this going a few more years.

2) I think inflation will have a much larger roll to play this time so “If” they decide to end the stimulus sugar high, the crash will not be as large as last time.

I still think the last time was a once in a life time event.

One more #
3) The PTB are trying to pass a 15-25K first time buyer grant (yet more sugar LOL), and the loans being made now are not (yet) nearly as crazy as last time (still got a few years IMO).[/quote]

This without the crash part

[scaredyclassic]

[quote=temeculaguy]I will happily call it a bubble right now. Mark my words as I will link this post in the future. The invisible hand has been stymied and nothing good ever comes from that, unless inflation counteracts it. Anecdotal case in point, my son and his wife have lived with me rent free through the pandemic and have a six figure down payment. Yes they are mid to late 20 somethings with degrees and a low six figure combined income and they cannot buy a starter home in Temecula. The last time this happened it was 2006 and we all know how that turned out. Haircuts are coming, the two freshly minted teachers rule is back in play, when two freshly minted teachers cannot buy a condo the bubble bursts, exhurbs get it first and gt it the worst, I smell Deja Vu! I like my house, just signed contracts for solar and tesla powerwalls, already got a fake lawn so I’m staying put but I’ll pick up a rental or two in the next crash, your results may vary. But thee current valuations are not sustainable.

The house I paid 270 for at the bottom in 2008 is worth 700-800, you have got to be kidding me, 500 maybe.[/quote]

It’s beautiful they can live with you.

Why should they buy? Stay at TGs place, stack cash, retire at 40!

[scaredyclassic]

[quote=sdrealtor]Next point to address is TG personal experience. He was one of us following things much closer than most. He’s a sharp, opportunistic guy and his expereince does not match the average. Some people always beat the market. He caught the bottom and got himself a sweet deal in a market that was particularly hard hit and overshot what it should have.

More reasonable price for that was probably more like the mid 300’s vis a vis rent vs buy. Then he invested in improvements on a house that was not cared for. Fake lawns dont grow on trees or lawns nor does anything else he put into making his house his own. End of the day a more typical base price for the cost of that house as it is should be closer to $400K.

That was 13 years ago. At just over 5% /yr a house will double in 13 years. Thats only marginally more than what we have truly expereinced in inflation. Time passed and we got older. Interest rates are almost half of what they were back then also.

The fact that houses have more than doubled in 13 years isnt so astounding as to how it happened and usually does.

We would like to think homes go up gradually over time in a even climb. They dont! At least not here! They muddle, they climb slowly than they gap up astromically in a very short period of time. It happened between Nov 2003 and Feb 2004. It happened again between Nov 2020 ans Feb 2021. Its the way things work here.

I will happily take your bubble bet right now! Bubbles burst they dont slowly deflate. Im not sayiing prices wont slow, flatten or pullback but barring a cataclysmic event like a natural disaster or foreign invasion there will be no burst

About 10 years ago I wrote about what I thought would happen and it did. There are 3 main levers. Passage of time, Interest rates and inflation that will make what seemed unreasonabvle pricing levels reasonable again. The last time it was mostly time and interest rates with a little inflation. This round it inflation and time with sustained low interest rates bring us back into balance.

There will be better opportunties ahead but anyone expecting 20% + declines in the better areas of SD will be sadly disappointed. I dont follow TG’s area as closely but know prices there have not gone up there close to what they have here. They dont have the desireability up there to the big money relocators we have here but folks from here will increasiong get pushed up there to commute. So I’ll go with no more than 20% there as well.

Betting window is open![/quote]

A thought I have often while driving

Traffic seems to me to represent financial markets.

Often it’s just slow. Or stopped. Sometimes traffic races along.

Some idiots go too fast, or have bad luck, and lose it all in a crash. Excessive lane changing, like excessive trading, often ends poorly.

Basically, everyone’s tooling along at various rates on varied roads. The roads are more quickly repaired now, so the bubble won’t burst.

[scaredyclassic]

[quote=gzz]The Dow hit 380 in 1929, and didn’t get that high again until 1954.

It was at 600 in both 1959 and 1974. Because inflation was high then, that was about a 40% loss over 15 years when adjusting for inflation.

The 1929 to 1954 0% nominal gain also represents about a 40% inflation adjusted loss over a 25 year period.

While a lot of people are worried about inflation hurting the stock market, I think the larger risk is the share of GDP going to public company profits could decrease substantially due to populist redistributive policies. Both direct cash transfers, but also things like interest rate caps on credit cards and antitrust cases that hurt the profitability of tech monopolies.

We’ll see if the Dems hold Congress next year. If they do, and Biden continues to be more substantially more popular than Trump, ramped up taxes on corporations could be the result.[/quote]

Right. I’m with you. But 10 year rates are 2 perc. Right now. Would you lock in a 10 y cd at 2 perc interest? Isn’t that essentially what one is doing by paying off such a loan?

[The-Shoveler]

IMO I think you could see CD rates in the 4’s possibly 5’s within 5 years.

Just a guess, should be fun to look this post up in 5 years LOL.

[svelte]

I think I’ve been crossing back and forth between two topics in this thread and haven’t made myself clear.

Do I think housing prices will drop? Yes, at some point in the next fews years. As bad as 2008? Nope. It may not hit 20% down as sdr points out.

What I do think will happen is that stocks will crash. Probably greater than 20%, perhaps 30, unsure about 40. And I’m totally unsure of the timing of that.

I could totally be behind the times. Perhaps we are drawing so many tech jobs that housing prices won’t dip. Certainly a possibility.

Another thing I may not be factoring in is just what sdr pointed out. House price increases aren’t linear. At least in my neighborhood, we are coming off a few years of not impressive price increases. Then this year hit. Perhaps it is making up for past years when we got overlooked, and when viewed through that lens perhaps 30% increase is justified.

I don’t know. I’m not an expert. I just play one on the internet.

[Anonymous]

[quote=svelte]I think I’ve been crossing back and forth between two topics in this thread and haven’t made myself clear.

Do I think housing prices will drop? Yes, at some point in the next fews years. As bad as 2008? Nope. It may not hit 20% down as sdr points out.

What I do think will happen is that stocks will crash. Probably greater than 20%, perhaps 30, unsure about 40. And I’m totally unsure of the timing of that.

I could totally be behind the times. Perhaps we are drawing so many tech jobs that housing prices won’t dip. Certainly a possibility.

Another thing I may not be factoring in is just what sdr pointed out. House price increases aren’t linear. At least in my neighborhood, we are coming off a few years of not impressive price increases. Then this year hit. Perhaps it is making up for past years when we got overlooked, and when viewed through that lens perhaps 30% increase is justified.

I don’t know. I’m not an expert. I just play one on the internet.[/quote]

If there is a stock market crash, housing will crash too, guaranteed. The same forces are blowing up both bubbles. And if there is a crash, it will be far worse than 2008. That bubble was purely housing and mortgages, now there is more insane speculative money out there than I’ve ever seen. This makes the dot com bubble look like child’s play. This bubble is everywhere. Look at the insane housing prices, stocks, crypto currencies, even baseball cards. I not kidding, I follow sports collectibles and there are cards auctioning off for 7 figures on a weekly basis. This is insane and unprecedented.

[an]

[quote=svelte][quote=an]
Yes, every crash is different. Not every crash cause everything to crash. Oil prices in the 70s caused massive inflation and housing went up almost 10x.
[/quote]

The stock market crashed in the 70s.[/quote]
But not housing. Like I said, not everything crashes. Housing went up almost 10x.

[scaredyclassic]

[quote=deadzone][quote=svelte]I think I’ve been crossing back and forth between two topics in this thread and haven’t made myself clear.

Do I think housing prices will drop? Yes, at some point in the next fews years. As bad as 2008? Nope. It may not hit 20% down as sdr points out.

What I do think will happen is that stocks will crash. Probably greater than 20%, perhaps 30, unsure about 40. And I’m totally unsure of the timing of that.

I could totally be behind the times. Perhaps we are drawing so many tech jobs that housing prices won’t dip. Certainly a possibility.

Another thing I may not be factoring in is just what sdr pointed out. House price increases aren’t linear. At least in my neighborhood, we are coming off a few years of not impressive price increases. Then this year hit. Perhaps it is making up for past years when we got overlooked, and when viewed through that lens perhaps 30% increase is justified.

I don’t know. I’m not an expert. I just play one on the internet.[/quote]

If there is a stock market crash, housing will crash too, guaranteed. The same forces are blowing up both bubbles. And if there is a crash, it will be far worse than 2008. That bubble was purely housing and mortgages, now there is more insane speculative money out there than I’ve ever seen. This makes the dot com bubble look like child’s play. This bubble is everywhere. Look at the insane housing prices, stocks, crypto currencies, even baseball cards. I not kidding, I follow sports collectibles and there are cards auctioning off for 7 figures on a weekly basis. This is insane and unprecedented.[/quote]

From a recent blog on comic book speculation.

(I do own a giant size X-Men 1 in a safe deposit box sadly not super high grade.

Purchased new as a lad.

Too bad I didn’t buy a handful of them.

I would never sell. Comic book analyst here sounds savvier and soberer than most wall St. Analysts…..)

Conclusion
Our current comic book market is one of the hottest markets I have ever seen. Many knowledgeable people in the industry are comparing it to the crazy 90s comic book boom and bust. During that time, comic book speculation became an off-the-hook gambling mentality. People chased books with no clue as to the value. Speculators were storing Modern Age books of no value in storage lockers. Books like the X-Men #1 (1991) were simply hunted to the point of delirium. The result was a comic book market collapse and many retail establishments going out of business.

Now, we have a market on stimulation steroids fueled with crazed online buying due to the pandemic. The key factor for this burst of buying is the added stimulus checks. How will this end? Who knows? I definitely believe history will not repeat itself as speculators are a tad savvier than they used to be. That said, I predict within a year everything will be relatively back to normal (God willing). Hopefully, we should see this level of speculation subside. Either that, or books like Giant-Size X-Men #1 will be approaching the $100K barrier. At this point, nothing would shock me in comic book speculation except the level of denial for people that think it can go on forever.

[an]

[quote=deadzone]If there is a stock market crash, housing will crash too, guaranteed. The same forces are blowing up both bubbles. And if there is a crash, it will be far worse than 2008. That bubble was purely housing and mortgages, now there is more insane speculative money out there than I’ve ever seen. This makes the dot com bubble look like child’s play. This bubble is everywhere. Look at the insane housing prices, stocks, crypto currencies, even baseball cards. I not kidding, I follow sports collectibles and there are cards auctioning off for 7 figures on a weekly basis. This is insane and unprecedented.[/quote]100% agree. Considering how catastrophic it would be if we see a massive crash of this magnitude when memory is still so raw from 2008. My bet is the fed and government will act BIG if we get any sign of major crash. We might see $20T stimulus before we see repeat of 1929 or 2008. So, I’m betting on inflation.

[Coronita]

[quote=scaredyclassic][quote=svelte][quote=an]
Yes, every crash is different. Not every crash cause everything to crash. Oil prices in the 70s caused massive inflation and housing went up almost 10x.
[/quote]

The stock market crashed in the 70s.

[img_assist|nid=27356|title=December 1972 SP500|desc=|link=node|align=left|width=466|height=297]

[quote=an]
We have never ever before talk about up to $10T in stimulus. I don’t think it’ll stop at $10T either. [/quote]

Perhaps, but I’m not convinced everything that Biden has proposed will actually be passed.[/quote]

things must be frothy if scaredy is contemplating taking on more debt. My mortgage is tiny and refinanced at 2.5, but it makes perfect sense to me to take a recent offer of 300K extra cash out, refi the whole mess at 30 years at 2.625%, and dollar cost average the proceeds into reits, gold and international stocks over the next 36 months.

sure seems likely from my distorted vantage point now that those assets will be more than 26.25% higher 10 years from now, or really any asset will be higher 10 years from now. it is almost hard to visualize a longlasting crash. even I, a pessimist that bums out the other pessimists, didn’t sell when the pandemic hit, just kept buying. I was like, eh, nothings real anyway. i capitulate to insanity.

not that I’ll actually do it, but it seems like a logical thing to do. which means it’s probably insane. the more likely thing I’ll do is pay off my stupid mortgage. stupid.[/quote]

I took 540k out at 3% and trying to get my first mortgage payment on $160k invested. Lol….boring stuff, no tech.
Wish gold wasnt so expensive.

[Author]

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